Will crypto market crash as U.S.-Iran peace negotiations hit a deadlock?

Crypto prices stayed muted with major assets, including Bitcoin, experiencing slight declines on Friday as hopes of peace between the U.S. and Iran began to fade.

Bitcoin (BTC) price traded sideways between $77,000 and $79,000 over the past 24 hours before consolidating around $77,700 at press time, down 0.6% in the period. Ethereum (ETH) was down 1.5%, exchanging hands at $2,314, while XRP (XRP), BNB (BNB), and Solana (SOL) saw less than 1% sideways movement on the day. The global crypto market cap was down 0.2% at $2.68 trillion, indicating subdued interest from investors.

This trend is likely from traders entering a wait-and-watch mode as the odds of peace between the U.S. and Iran look rather slim while both continue with their back-and-forth escalation at the Strait of Hormuz.

Per recent reports, U.S. President Donald Trump has noted that the U.S. is under no pressure to end the war with Iran, though a failure to reach terms could likely lead to a heavy attack on Iranian infrastructure.

“I have all the time in the world, but Iran doesn’t. The clock is ticking!” Trump wrote in a recent Truth Social post.

The U.S. has continued the naval blockade against Iranian ports for the tenth consecutive day to pressure Iran to accept a denuclearization deal. However, Iran, for its part, has rejected any peace talks in Islamabad as long as the blockade remains in place, stating it will not succumb to bullying.

The stalemate regarding the shipping lanes has led crude oil prices to move back to $95 and could surge back above $100 if no resolution is found. Concerns remain over a potential global recession if conflict disrupts the Strait of Hormuz for a prolonged period.

Traditional markets echoed these concerns with safe-haven assets such as gold and silver down slightly on the day. However, Asian tech stocks like the Nikkei 225 and Hang Seng ended a little higher despite the geopolitical noise.

As such, if there is a delay in any peaceful resolution to the conflict, it could continue to pressure markets, especially risk assets such as cryptocurrencies, including Bitcoin. 

A prolonged geopolitical standoff could cause Bitcoin to lose its gains over the past month and hence trigger a wider selloff across the altcoin market. If it fails to hold its current support levels, investors may see a rapid exodus from more volatile projects as capital seeks the relative safety of cash or stablecoins.

How will Bitcoin react?

Singapore-based QCP Capital maintains that the recent bounce in Bitcoin does not signal a structural shift and is unlikely to reverse the bearish momentum seen in recent months.

The firm noted that confidence in risk assets has been supported mainly by the temporary truce extension and reassurances from Federal Reserve Chair nominee Kevin Warsh regarding the central bank’s independence.

Derivatives data also suggests caution. Options markets continue to show muted short-term volatility, while demand for downside protection remains elevated, indicating hedging activity.

In contrast, analysts at K33 Research see scope for further upside. They point to a divergence between Bitcoin’s price recovery and persistently negative funding rates, which could leave the market exposed to a potential short squeeze.

Even so, the $79,000 to $80,000 range is emerging as a key resistance zone, aligning with the realized price of short-term holders who may look to exit positions as prices rise. Data platform CryptoQuant has similarly described the $80,000 level as a “critical inflexion point.”

From a longer-term perspective, Anthony Pompliano argued that sharp pullbacks can lay the foundation for stronger rallies. He suggested that a 50% correction from October highs could eventually pave the way for new peaks, adding that “Bitcoin has become the king of safe havens in all kinds of chaos.”